Customs duty in scrap export

As per business dictionary “scrap” means “waste that either has no economic value or only the value of its basic material content recoverable through recycling”

The term “Scrap” has not been defined any where in the GST Laws. As such one can derive its meaning as per normal business or commerce parlance. In GST regime, in order to be taxable the waste and scrap don’t have to pass the test of “manufacture” or “mechanical process” or marketability.

While taxability of waste and scrap is no longer contentious, finding proper HSN code is definitely a tedious task. The highest rate for scraps material is 18%.

GST RATE CHART OF SCRAP MATERIALS

HSN Code	Descripttion	GST Rate
3915	Plastic waste, parings or scrap	5%
4004 00 00	Rubber waste, parings or scrap	5%
4017 00 20	Hard Rubber waste or scrap	5%
4401	Wood Scrap	5%
4415	Packing cases, Box, Crates, Drums	5%
4707	Paper waste or scrap	5%
7001	Cullet or other waste or scrap of Glass	5%
7112	Waste and scrap of precious metal	3%
7204	Vehicle Scrap	18%
7204	MS Scrap all types	18%
7204	Scrap US Rail	18%
7404	Copper Waste & Scrap	18%
7503	Nickel Waste & Scrap	18%
7602	Aluminium Waste & Scrap	18%
7902	Zinc Waste & Scrap	18%
8002	Tin Waste & Scrap	18%
85	E-Waste	5%
8548	Waste and scrap of primary Cells primary batteries and electric accumulators	18%

Note

e-waste means electrical and electronic equipment listed in Schedule I of the E-Waste (Management) Rules, 2016, published in the Gazette of India vide G.S.R. 338 (E) dated the 23rd March, 2016, including the components, consumables, parts and spares which make these products operational.

The HSN code for a large number of Scraps materials has till now not yet been notified. As a conservative approach , if some one does not find appropriate HSN code of a scrap item, he may cover the same under residual Entry 453 of Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017.